February 20, 2003
Gains for divested members now in effect
OPTrust now has the go ahead to process gains
improvements for divested members. By February 28, 2003 all divested members
who will qualify for Factor 80 before June 30, 2003 will receive a package
which will include the members’ anticipated Factor 80 eligibility date and
an estimate of his/her pension amount. After that time, Factor 80 dates will
be shown on Annual Pension Statements, as with all members.
The benefit changes that apply to divested members include:
- The extension of the temporary Factor 80 early
retirement option to March 31, 2005.
- The extension of the temporary “points off” program
for divested members over 55 who choose to retire early with a reduced pension, to
December 31, 2005. Under this program, the divested member’s pension reduction will
be based on how many years he or she is from eligibility for an unreduced
pension under one of the Plan’s permanent unreduced retirement options: these
include Factor 90, the 60/20 option or normal retirement at age 65. Under
the Plan’s normal rules, the reduction is based on how far away he/she is
from age 65.
- A permanent reduction in the CPP offset to .655%.
This means a smaller reduction to divested members’ OPTrust pensions at
- The elimination of the CPP offset on survivor
pensions prior to the date on which the retiree would have reached age 65.
Survivors of retirees will now be paid at 60% of the pension their spouse
or parent would have received until the date the retiree would have
reached age 65.
If you qualified for Factor 80 between November 1, 2002 and now, you are
required to end your membership in the pension plan within 184 days of the
end of the month in which you reached Factor 80. Please contact us
immediately if you think you qualified for Factor 80 during this time and
have not received a letter from us.
|For example: if you are a divested
member who reached Factor 80 on December 12, 2002 you must leave
your employment by July 4, 2003. You would receive your first
pension payment in August 2003. You can leave earlier for example,
on June 30 , 2003. Your first pension payment would be July 2003.
The OPSEU Executive Board decided to extend recent
improvements to the OPSEU Pension Plan to divested members earlier this year.
On December 1, 2002, a package of temporary and permanent improvements to
the Plan came into effect for active members, and current and deferred
pensioners. OPSEU’s recent decision will extend these benefit improvements
to members who have been divested from the Plan. The package of improvements
was selected by OPSEU in its role as a Plan sponsor, and is to be paid for
from the members’ and pensioners’ $467 million share of gains in the OPSEU
The benefit changes affecting divested members required an amendment to
the text of the OPSEU Pension Plan. This amendment had to be signed by both
Plan sponsors – OPSEU and the Government of Ontario – and filed with the
regulatory authorities before OPTrust could administer these enhanced
benefits. The amendment has been signed by both sponsors and has been filed.
The $467 million represents the members’ and
pensioners’ unallocated share of funding gains realized by the Plan from
1999 – 2001. OPSEU has also allocated a portion of the members’ share of
gains to an extended contribution holiday for active members. An additional
$146 million was set aside to stabilize member contributions in the future.
In total, the Plan experienced gains of $867 million for the period, which
are shared between the Government of Ontario and the members and pensioners.
The Government of Ontario has placed its share of gains in a Government of
Ontario stabilization fund.
Read this for more information on the improvements in
the OPSEU Pension Plan.
Does OPTrust have your current address?
Divested members are urged to keep their address
up-to-date at OPTrust so they can receive important information from their